Getting your car totaled is already scary and frustrating, but ensuring you receive a fair payout from your insurance company can also be a stressful process. Just when you think a car accident is bad enough, getting your car declared totaled can add to the frustration. But the total loss of a car can have a happy ending.
With the right car insurance and possibly some negotiation skills, you can put the accident in the rearview mirror, recover the value of your car, and get back on the road. Read on to learn how to get the most money from insurance for totaled cars.
PRO TIP! Search numerous insurers to find savings in seconds.
Understanding total loss
A car is considered a total loss when the cost of repairing it exceeds a certain percentage of its actual cash value (ACV). This percentage varies by state and insurance company, but it’s typically around 70-80% of the ACV. When a car is totaled, the insurance company will offer a settlement based on their assessment of the vehicle’s value before the accident.
A car can qualify as totaled if the repair cost is more than the vehicle’s worth, it’s damaged beyond repair, or it’s stolen and not recovered. Just because your car is totaled doesn’t mean you’ll get an insurance payout. You can only get an insurance claim payout if you carry full insurance coverage on the vehicle.
In case of an accident or loss, an insurance adjuster will examine your car to determine its worth. At this stage, you can negotiate the car’s value with the adjuster or hire an attorney to reach a settlement.
6 Steps to get the most money from insurance for your totaled car
Follow these steps to ensure you receive the maximum payout for your totaled car:
1. Ask for the valuation report
Before negotiating, request a copy of the valuation report from your insurance company. This report details how they calculated the value of your vehicle and the comparable cars they used for reference.
In many cases, your insurance company might refer you to an insurance or claims adjuster to investigate the state of the vehicle, your coverage, and your claim after an accident. These professionals will check to see if you have full coverage and may gather statements regarding the accident. If there is a police report, the insurance adjuster will typically review it.
After checking your insurance, if the insurance adjuster believes the claim is covered, they will inspect the vehicle to determine the cost of repairs. This is where you can also discuss the valuation with the inspector, including whether repairs are even possible. If your vehicle is totaled, it can’t be repaired or it’s too costly to repair. The valuation report can offer additional insights into this.
2. Conduct your research on the value of your vehicle
Once you understand the state of the vehicle and repair costs, it’s important to double-check and research your vehicle’s value. You can use online tools like Kelley Blue Book or Edmunds to research the market value of your car in its pre-accident condition. Consider factors like mileage, features, and location for an accurate comparison.
3. Gather and provide supporting documentation
Collect and provide any documentation that supports a higher value for your vehicle, such as:
- Recent maintenance and repair records
- Receipts for aftermarket upgrades or accessories
- Photographs of the car’s pristine condition before the accident
- Advertisements for similar vehicles in your area
- Police report, if applicable
- Statements from other drivers involved in the accident
4. Consider getting a third-party appraisal
If you disagree with the insurance company’s valuation, consider hiring an independent third-party appraiser to evaluate your vehicle’s value. This can provide additional evidence to support your claim.
If you think your vehicle is undervalued, you can contest the insurer’s appraisal by getting your own. You can find independent appraisers through local body shops and garages. You’ll need to get the inspection details in writing to present them to your insurance company.
Additionally, Car and Driver explains that in some cases, you might keep your car even if it is declared a total loss. It depends on your state’s regulations, but most insurers have to abide by the ‘made whole’ doctrine which dictates that you be restored to the same financial position you were in before the accident.
5. Negotiate with your insurance company
Armed with your research and documentation, negotiate with your insurance company for a higher settlement. Be persistent, but also reasonable. Explain why you believe their valuation is too low and provide your evidence.
Steps to negotiate with your insurance company include:
- Understand your car’s current value. Researching your car’s value can strengthen your argument and empower you to request a higher settlement.
- Prepare a counteroffer. If you expect your insurer to make a low offer, prepare a counteroffer with the value based on an independent appraisal and references to the car’s value.
- Get help! In some cases, hiring an attorney to take care of the car settlement for you can be worth it to get a higher settlement as well as save valuable time.
6. Get what is rightfully yours
If your insurance company refuses to budge, you may need to escalate the matter or seek legal counsel. However, if they agree to a higher settlement, ensure you receive the full amount, minus your deductible and any outstanding loan or lease payments. You can learn more about who gets the insurance check when your car is totaled.
Whose insurance pays for the damages on your car?
If the other driver was at fault for the accident, their liability insurance should cover the damages to your vehicle. If you were at fault, your collision coverage comes into play for the repairs or total loss settlement, minus your deductible and depending on your coverage amount. If the other driver doesn’t have adequate insurance, but you have uninsured motorist insurance, that may cover costs as well.
How do insurance companies decide how much to pay out?
Insurance companies use various tools and databases to calculate the actual cash value (ACV) of your vehicle before the accident. Factors include the make, model, age, mileage, condition, and market prices for similar vehicles in your area. If you feel the insurance company is undervaluing your vehicle, you can speak with an independent appraiser and do your own research to provide a counteroffer that may influence how the insurance company values your vehicle
Who receives payment for your totaled car?
If you own your car outright, the insurance company will issue the settlement payment directly to you, usually via check or bank transfer. However, if you have an outstanding loan or lease, the payment will likely go to the lienholder or leasing company first to satisfy the remaining balance. Any remaining balance will then go to you via the leasing company or directly from the insurer, minus any deductible you have on the policy.
How long does it take to get an insurance check for a totaled car?
The time it takes to receive your settlement can vary depending on several factors, such as the strength of your claim, the complexity of the case, and whether you provided all the necessary documentation. Likewise, some insurers are known for faster claims processing than others.
Generally, you can expect to receive your check within 30 to 60 days after the claim is approved, but delays are possible if there are disputes or incomplete information.
Factors that may delay your insurance claim:
- The strength of your claim, including the necessary documentation.
- The complexity of the case, including the number of people or vehicles involved and how clearly the case was recorded.
- An incomplete insurance claim, including missing documentation, can delay claim processing.
Maximize your totaled car’s value
Getting a fair settlement for your totaled car may require diligence, research, and negotiation. By understanding the process, gathering supporting documentation, and being persistent in your negotiations, you can possibly maximize the payout from your insurance company and receive the compensation you deserve.
But insurance can be expensive. Learn how much car insurance you need, how to lower car insurance, and at what age you can expect car insurance to go down. And in case you need convincing, find out why you need car insurance here.
FAQ
Can you get more money from insurance for a totaled car?
In some cases, you may get more insurance money for a totaled car than for repairs. In addition, it is possible to negotiate a higher settlement by providing evidence that your car was worth more than the insurance company’s initial valuation.
Why is the first settlement offer so low?
Insurance companies often start with a low offer to minimize their payout. Remember that you have the right to negotiate and provide evidence supporting a higher valuation.
Should I counter a settlement offer?
Based on your research and documentation, if you believe the insurance company’s offer is too low, you should counter with a higher amount and be prepared to negotiate. In some cases, it can be valuable to hire a lawyer to represent you, especially for high-value vehicles.
How is the settlement amount calculated when total loss?
Insurance companies use the actual cash value (ACV) of your vehicle before the accident, factoring in make, model, age, mileage, condition, and local market prices to calculate the settlement. However, they may underestimate or lower this value, so doing your own research can help ensure you get a fair settlement.
Should you accept the insurer’s offer?
You should only accept the insurer’s offer if you believe it accurately reflects your vehicle’s fair market value based on your research and documentation. Otherwise, you have the right to negotiate or present a counteroffer.
